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    Doing Right

    For CSNews Hall of Famer Bill Douglass, success and integrity go hand in hand.

    By Linda Lisanti

    Inspiration in business can come in many forms. For Bill Douglass, this year's retailer inductee into the Convenience Store News Hall of Fame, one of the most important revelations of his life and career came about while he was digging graves.
    At age 14, Douglass' first paying job was maintaining the 20-acre grounds of a historic Pennsylvania church and cemetery under the watchful eye of a minister with strict rules.

    "I would dig foundations for granite headstones. If the minister didn't like it, he would tell me to do it over. If I didn't edge those tombstones correctly or if I didn't remove all the weeds, he told me to do it over. If I was supposed to be there at 2 p.m., and I got there at 2:05 p.m., that wasn't acceptable. That was the rule," Douglass said. "I didn't always like the rules, but out of that experience, I came to appreciate the value of doing things right."

    Doing right has since become a principle that guides Douglass through all aspects of his career. Being a perfectionist served him well during his 21 years of service at ExxonMobil, a company he said prides itself on executing superbly and being sticklers on morality.

    Doing right is the foundation upon which Douglass built his own company where employees must possess two things without exception -- a good attitude and impeccable morals.

    Doing right is also what Douglass tries to get lawmakers on Capitol Hill to understand and act upon when he testifies before Congress on behalf of the convenience store industry on such critical issues as credit card fees and anti-price gouging legislation.

    There's no doubt doing all these things right is what compelled Douglass' peers to select him to be inducted into the Convenience Store News Hall of Fame -- an honor that took him completely by surprise.

    "I showed my wife the induction letter with all the past inductees, and I said 'look at all those heavy hitters. I feel like I'm in the minor leagues,'" Douglass told CSNews in an exclusive interview. "I was shocked, just shocked, because you don't do what you do with the objective of being anything but effective in supporting the industry."

    Those who know Douglass well, though, are not surprised he is being recognized for his years of hard work and dedication. His induction ceremony, held Oct. 28, in Dallas, brought out some of the top names in the convenience industry, including 7-Eleven CEO Joe DePinto, Alon USA President Jeff Morris, Cumberland Farms Chairwoman Lily Bentas and E-Z Mart CEO Sonja Hubbard, who was recently named the first female chair of NACS.

    NACS president and CEO Hank Armour, a friend, colleague and 2004 retailer inductee into the Convenience Store News Hall of Fame, said Douglass possesses an unparalleled combination of character traits, and is perhaps the finest individual he has ever met.

    "He's smart, engaged, incredibly humble, soft and gentle, but simultaneously hard as a diamond," Armour praised. "No one has more personal integrity than Bill Douglass."

    Douglass, 72, got his start in the industry at age 16, working at an Esso service station. There, he became impressed with an Exxon sales representative who wore a suit, drove a nice company car and was a college graduate. "It struck me: This is a whole lot more attractive than the manual labor opportunities available in our rural economy," he said.

    The sales representative told Douglass he wouldn't have a shot at that type of job until after college and military service (the draft was in place at the time), so that's exactly the path he followed. "Digging graves by hand will make education look like a way out," Douglass noted.

    After graduating from Muhlenberg College in Allentown, Pa., with a business degree, Douglass joined the U.S. Marine Corps and became an officer. He chose the Marines because, in his view, it was the only branch of the armed services to offer "real discipline."

    Once released from service, Douglass returned home to Pennsylvania and soon showed up at Exxon's field office, using the sales representative as a reference to land himself a position. It didn't take Douglass long to realize he was well-suited for this business, and for the next two decades, Douglass worked for Exxon in 12 different assignments at eight locations.

    As he moved up the corporate ladder -- ultimately cracking the Top 300 of Exxon executives -- he enjoyed the perks of corporate life, but always felt a persistent desire to be an entrepreneur. It was a dream instilled in Douglass by his stepfather. "He always wanted to have his own business, but wasn't disciplined enough. I listened to him talk about it all the time, so I became captivated with the idea of being an entrepreneur."

    Having grown up poor in Pennsylvania's rural countryside, however, Douglass thought having his own business was the "impossible dream." Still, when Exxon asked him to take on a new role overseas, meaning he would have to leave his family behind, Douglass decided it was the ideal time to try and make his impossible dream a reality.

    "You only go around once in life, and I didn't want to go through my life without seeing whether I couldn't be more effective at what I thought needed to be done," he explained.

    On July 1, 1981, Douglass bought an Exxon-branded distributorship in Sherman, Texas, which included six service stations and some rural commercial accounts. It also included three Exxon divisions -- transport, tank wagon and lubricants -- as well as a tires, batteries and accessories division. Douglass Distributing was born.

    Two years later, Douglass decided to enter the world of retailing when his largest service station burned down. He offered to rebuild the site and rent it back to the dealer -- if the dealer would rebuild it as a convenience store. The dealer turned him down, so Douglass, seeing the opportunity, became the retailer. "We opened up at 285,000 gallons a month in a little town. That was a very good store," he said.

    Today, Douglass Distributing is a full-line petroleum distributorship, delivering to 150 stores, including the 15 Lone Star Food Stores it operates. Like everything else, Douglass chooses to keep the retail operation small and regional in order to do it right.

    From an initial staff of just six, the Sherman, Texas-based company has grown to nearly 300 employees, yet is still a family-run business. Douglass' wife of 51 years, Joan, serves as treasurer, while daughter Diane manages the retail division, and son Brad oversees the wholesale division. The company generates $400 million in revenue a year.

    For 25 consecutive years, Douglass has been a recipient of the Exxon Commitment to Excellence Award, given to the top 5 percent of Exxon-branded distributors.

    Among all these achievements, though, the Hall of Famer's greatest pride is his employees. "What I enjoy most these days is really just to watch the development and the success of my people," Douglass said, noting he and his family consider every Douglass Distributing employee a part of their extended family, and treat them as such.

    In return, he expects his employees to always carry themselves with moral integrity. "We tell people, 'we won't fire you for a mistake, but we'll fire you for lying or cheating,'" he said. "Believe it or not, you can roll a truck, you can do some really stupid things to lose us money, but as long as it's not a question of your morals, we'll forgive you. But if you do something to a customer or co-worker, that's fatal."

    Because everyone knows the cost of deviating upfront, Douglass said the result is a very comfortable work environment. He believes what his employees tell him and freely admits he and his family are probably "patient to a fault," particularly when it comes to helping employees through life crises, such as illness or divorce. They have allowed employees to take leave from work for more than a year when necessary.

    "We understand everybody goes through difficult times. We adjust the responsibilities based on the situation, and try to recognize those taking on the extra workload with compensation," he said. "It can be a tricky situation, but over time, there's a recognition [among the staff] that if they stumble, the same courtesy will be given to them."

    With a boss this compassionate, it's no wonder Douglass garners such admiration from his staff. Last Christmas, the employees bought a touching, full-page ad in the local newspaper describing the Douglass family as "brilliant, inspiring, selfless and devoted." Not many employers receive a Christmas gift like that from their employees.

    For Chief Financial Officer Kim McKinney, a 20-year employee of Douglass Distributing, what has always struck her most about Bill Douglass is how kind-hearted he is.

    "He always has a nice word for everybody and even though you know how rushed his schedule is, he takes the time to talk with everyone and catch up," she said.

    She's witnessed him let one man borrow a company truck to visit his family in Mexico, and he kept another woman on the payroll when she was diagnosed with cancer so she could retain her insurance and get the best treatment. McKinney also recalled one day when Douglass noticed she had a cold and went out and bought her medicine.

    "I am really honored to know a person like him," she said.

    Cultivating a strong team has allowed Douglass to pursue other passions, including government affairs. His long-time involvement as an industry advocate with NACS: the Association for Convenience and Petroleum Retailing, is legendary.

    "My claim to fame has been government relations. I've testified numerous times in Washington," said Douglass, who was the 2004-2005 NACS chair and former NACS vice chair of government relations. "I'm passionate about it, and that goes back to my days working as Exxon's government relations manager. When I came into NACS, I thought the only thing I could contribute as a little retailer is my government relations background."

    Douglass has testified before Congress and made personal lobbying visits to Washington, D.C., more than any other retailer in NACS' history, according to Armour. "No retailer is more dedicated to the industry than Bill is," he said, noting Douglass taught him to look legislators in the eyes and "talk straight" to them.

    The industry champion credits his experience with Exxon as his greatest advantage in talking with Congress because both are such huge bureaucracies. Douglass said he understands a bureaucracy must be dealt with differently than an individual. "I don't get frustrated … I have the ability not to snap when [lawmakers] say stupid things. I take them on in a nice, polite manner," he said.

    Not one to shy away from confrontation, he cited a moment while testifying before the Senate when Barbara Boxer, a Democratic senator from California, kept referring to him as "a rich Texas oil man." Speakers before Congress are not supposed to raise their hands and interrupt lawmakers, but Douglass finally couldn't hold back. He told her "Excuse me Senator, but I am not an oil man. I'm a retailer. I sell oil that I buy from refineries."

    Douglass said he's so passionate about fighting for the industry because people can make more money in the legislature than they can as a convenience store operator.

    "[Lawmakers] have such a dramatic effect on your ability to do business, and we are not on a level playing field," he lamented. Independent retailers are especially disadvantaged since they do not have any name recognition with legislators, nor the economies of scale necessary to hire a government relations specialist, he added.

    When he testifies, Douglass said he feels he is taking a stand on behalf of all of the industry's smaller operators: "The association is their voice in Washington."

    While he enjoys government relations and plans to continue defending the industry, Douglass' first love is still being a retailer. The man who considers himself quiet and serious lights up when he talks about surprising and delighting customers.

    "I love the excitement associated with retailing. You have to be so creative because customers are so varied and their needs are constantly changing. That's challenging, but it's also exciting to see what the opportunities are," Douglass told CSNews.

    His daughter, Diane McCarty, president of the Lone Star Food Stores division, said the company would never be as innovative as it is without her father at the helm. "He's really what I would call a visionary," she said, admitting she's much more practical and operationally minded than her father. "He is such an out-of-the-box thinker."

    Back in 1996, after touring the United Kingdom, Douglass was convinced hypermarkets would make their way overseas and be successful in the United States, so he came back and designed a new 9,000-square-foot prototype with a state-of-the-art c-store, fast-food court, seating for more than 100 and a two-story indoor playground. The VanAlstyne, Texas complex -- the first of its kind in the area -- opened July 1997 and is still a destination.

    This June, Douglass returned to Europe, this time traveling around Germany to observe the impact of $10 per gallon gasoline on convenience store operations there. Once again, he came back to the states with insights and inspiration to transform his company. The Douglass team is now working with a strategic planner to develop a new approach that will help it contend with the unstable U.S. gas prices Douglass foresees will continue.

    "We recognize fuel volatility is here to stay. What they have done in Germany is move as hard as they can into fresh foodservice. One quarter of their stores are fresh," he said. "They have also done better in energy conservation. Some stores have a skylight that runs the whole length of the building, and they even put windmills on their stores."

    Already, changes are underway. On Dec. 1, Lone Star Food Stores debuted the first-ever El Monterey Cafe; in partnership with Ruiz Foods. The corner unit, developed by Ruiz with input from the retailer, offers hot and cold grab-and-go food items.

    "The concept is much more comprehensive than just a hot dog or a taquito program," McCarty said, noting the company is testing the unit in one store with hopes of expanding. "Fresh foodservice is absolutely the right move. It's what can differentiate us."

    Of course, the harsh realities of the marketplace will impact what other concepts will make it to implementation, she said. Like many c-store retailers, Douglass Distributing is closely examining all its costs to identify areas where it can improve, and is challenging its vendors to bring forth better deals amid this uncertain economy.

    Douglass is assured his daughter and son will do what's right, and said the company's future is what they make of it. He has handed over the day-to-day reins to them, and currently concentrates mostly on new concepts, acquisitions and other investments. "I'm in the twilight of my operating career. We sit down as a family and plan out our capital investments and acquisitions, but Brad and Diane are operating their divisions. I'm comfortable they know how to run a business. They're going to do fine."

    Following in their father's footsteps is no small task. They may not be perfect, but McCarty said both her parents are the best role models for all areas of life, as there aren't two better examples of work ethic, giving back to the community and investing in family.

    "I have always admired my father for being someone who truly put all his dimes on the line, and I've been impressed at how incredibly generous he's been in terms of truly letting us take the reins and manage the businesses," she shared. "He is so supportive, and we definitely know we can always go to him for input and insights."

    And that won't change, since Douglass has no plans to retire. Even though he's out of the day-to-day operations, he intends to continue working as long as it's still fun.

    "I'm going to do this as long as I enjoy it, and I still do," he said.

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